How do you start when you feel so overwhelmed?

[noppenbd]

Originally Posted by AmbitiousSaver

But she quoted $22K loss when we owed $252K... so I guess I'm looking at $19K loss now. Question though is... where/how would I find the money to come up with $19K at closing if I got $250,000?

Talk to your local bank or credit union. With good credit you may be able to get an unsecured personal loan. The interest rate will be high but this should be one of the first debts you tackle so hopefully it will not cost you much as you pay it down quickly. You should also consider the short sale although if your HELOC is through a different bank than the 1st mortgage, the HELOC lender will likely not go for it (since they will end up with nothing). But don't assume that, after you put it on the market and start to get offers then you can talk to the banks about the short sale.

[Petunia]

Originally Posted by AmbitiousSaver

Problem is... I keep wondering, what caused this... if I can't figure out - I can't figure out how to never get back into this. For awhile I thought, marital problems... we spent more when we were unhappy. No, can't be JUST that... not to this extent. And as much as I like to blame DH.... I realize, the problem is me.

He had it right all along... sit down at the beginning of the month with a piece of paper & write out everything, and then you can't go overbudget. But when we went thru marital counseling and I complained that DH wouldn't let me touch the money and he complained I wouldn't let him eat whatever he wanted in the house... the counselor suggested I take over the finances and DH could eat whatever he wanted in the house and we could "just buy more"

It also wasn't fair... DH had no idea of the finances to the point he has to call me to ask how he's going to pay for a tank of gas... meanwhile I resented the fact this burden was mine alone and he just had to come to me like a child asking a parent. That's probably where we also went wrong.... he'd bug me and bug me for this and that... saying how he was unhappy with the house, the car, the... whatever. So I'd resist and say no... but like a child the tantrum or unhappiness would stew... and I'm not a parent, I want to see my partner happy... so eventually I'd cave. How else do you get 15 cars in 8 years?

Originally Posted by AmbitiousSaver

When DH gets home... we're going to go over it together... everything is going to be a joint decision now. Our finances will be on a piece of paper clear as day on the refrigerator & anything ANYTHING we spend will go on that.

I'm really in no position to give advice, but these two things jumped out at me. I also have a spouse who avoided dealing with money and our financial situation, and I let that go on for way too many years.

It sounds like you and your DH are now able to get together and work out a mutual plan for your benefit. I second the person who suggested Dave Ramsey. A lot of what he has to say seems to be geared to get couples to work together, and he has information on how to get that ball rolling.

Oh, and I also agree with the person who said your counselor was out to lunch.

While it seems overwhelming now, I have every confidence that your situation will improve. You're here and taking steps to make things better.

[Scanner]

I read maybe 70% of the posts. . .skimming by. . .but the one thing that struck me was you admitting to denying your husband $50 for a pair of shoes (which is on the high side of reasonable for sneaks, very reasonable for dress shoes). I consider this a request for an essential expense and then you dropped $50 on a Pampered Chef item, which like what. . .they charge $50 for a pair of salad tongs?

And then, the poor guy wants to make a peanut butter and jelly sandwich in his house and you deny him? What's that about? Would you rather eat every meal down at the diner?

I'd be frustrated too if I were your husband. . .I don't have the answer but I think the answer is a more of a psychological shift vs. a financial shift.

Sorry if this came across crass.

[noppenbd]

Originally Posted by Scanner

I read maybe 70% of the posts. . .skimming by. . .but the one thing that struck me was you admitting to denying your husband $50 for a pair of shoes (which is on the high side of reasonable for sneaks, very reasonable for dress shoes). I consider this a request for an essential expense and then you dropped $50 on a Pampered Chef item, which like what. . .they charge $50 for a pair of salad tongs?

I'd be frustrated too if I were your husband. . .I don't have the answer but I think the answer is a more of a psychological shift vs. a financial shift.

Sorry if this came across crass.

I agree that this sounds like a double standard, but I am guessing (correct me if I'm wrong) that this may come out of not having a clear plan, and alternating between panic ("We need to stop spending now!") and rationalization ("I work hard, I deserve it.") I think this can be solved by having clearly written and agreed upon goals. You may want to consider having some amount of fun money each month that is not accountable to the other person. It may take a little longer to pay off the debt this way but it will lessen the stress a lot.

[Scanner]

And I would set one boundary - don't go to those Pampered Chef, Candle, Basket, etc. Female-Spend-Your-Money-Under-The-Illusion-of-Socializing-Parties.

I am tired of my wife getting invited to "parties" where there is an implied social expectation to drop some coin.

Let's see how it goes over if I have a Power Tool Party with a keg and I invite DisneySteve and JimOhio over and I ask them to drop $70 for a rasp after I demonstrate how to use it.

Yeah, that will go over real well.

[Scanner]

You can see I am a real barrel of laughs with DW.

[AmbitiousSaver]

LOL Scanner... no trust me, I get your point. I know part of it is a psychological shift too... I'm kinda thinking most irresponsible spending starts that way anyway. The fridge thing though... to be fair... was 9 years ago when we FIRST got married. I'd buy things to make for dinner and then he'd get the "munchies" and start eating stuff I had planned to use for dinner. But ... I was 18 at the time and we were newlyweds. I don't do that anymore... yeah, sounds incredibly stupid to admit we started listening to that counselor 9 years ago and just never changed our ways till things got this bad.

But noppend had it right... I'll do the finances, panic and say we can't spend any money... then I get comfortable and am like "Oh we can afford this".... and I haven't completely let my husband go deprived.... he may lose the smaller ticket items more frequently, but when he guilts me long enough I tend to give in and when I do it tends to be for a lot. Thats how he got 2 motorcycles that we had to end up selling a year afterwards because we bought them when we couldn't afford them.

I win more often on the smaller/everyday ticket purchase items. But yeah, its time to end the double standard... and I told him that myself and he just looked at me like "Umm yeah, I've been telling you this for YEARS" Needless to say, I think we're both finally coming to a point in our marriage we are both realizing that we are both at fault.

Oh and I found out the HVAC does not need replacing in our rental, so I was excited that I could put that cash from the stimulus to paying down the CC... so now its down to $10K instead of $12500. Small milestone but I was happy about it

[maat55]

Originally Posted by AmbitiousSaver

Thanks guys.... I just got off the phone with him and mentioned about the withholdings. Its amazing, I think for the first time we're both 100% on board that something has to change with the finances. Cause he'll come to me and ask me for a pair of shoes for $50 and I tell him we can't afford it, but then I go to a Pampered Chef party and spend $50... so I told him I recognize I have no accountability. But I mentioned the W4 like you suggested and he actually sounds willing to do it... just said he's worried about them not taking enough out in taxes and then having to owe at the end of the year.

How do we figure out what the right withholding amount is? I claim 2 and make around $40K, he claims 0 and makes $33K taxable income (but he gets like $20K additional in untaxed benefits from the military)... and we have a family of 6 now.

When his check is about 173.00 more you will be on track. Along with your debt you have a spending problem. When getting out of debt is your QUEST, you will look at spending 50.00 on shoes as horrible and so on. Between your savings and his extra pay you have 1400 more to pay off debt, not including the money you cut from your budget.

Remember this, when debt freedom is more important than petty wants, you will achieve it, happily. The day you stop looking at the want adds will tell you you are ready. Feel free to search for coupons that you need not want. Good luck.

[disneysteve]

Originally Posted by Scanner

Let's see how it goes over if I have a Power Tool Party with a keg and I invite DisneySteve and JimOhio over and I ask them to drop $70 for a rasp after I demonstrate how to use it.

I see two problems with that plan.

1. A rasp is not a power tool.
2. I don't drink beer.

Other than that, thanks for the invite.

[scfr]

This may sound like it's coming from out inn left field, but my suggestion is that instead of just randomly coming up with drastic ideas (sell the car! sell the house! stop eating!) you and your husband sit down and come up with a set of financial goals based on what you both want in the future, then come up with a plan of how you are going to get there.

If you don't have any idea how to do that, you may want to go together to the library and pick up a personal finance book geared towards couples that appeals to you both. [One to check out is Smart Couples Finish Rich ... And I would also suggest that you go to a bookstore and buy the workbook that goes with the book ... Even tho it would mean spending some money, it would be money well spent.] Then start reading the book together, share your thoughts, and come up with a plan. I think any plan you come up with the 2 of you together is much more likely to "stick."

Make a plan and work as a team.
Good luck!

[maat55]

[

And then, the poor guy wants to make a peanut butter and jelly sandwich in his house and you deny him? What's that about? Would you rather eat every meal down at the diner?

Wow, I eat a lot of peanut butter & jelly sandwiches to advoid eating out. Just today, after my wife had a wreck, I had to come home to take her to work, and I asked if she wanted me to make her a P&J and she said , no Well stop at a drive thru. I sat there and thought, you little !!!!!!, but she had a sandwich anyway, that made me feel better.

[creditcardfree]

Is the rental in the same city you live? If so, you could save some money by handling the management yourself and selling on your own.

Since you are military, I'm guessing it is in another city. (?) I would still look at selling and financing the remainder as others have suggested. You would no longer have management fees, maintanence expenses and you wouldn't keep digging a bigger hole. With a loan for the balance you would have a known quantity to work towards paying off.

If I remember from an earlier post, this rental was to be a college fund for the kids right? You'd be better off saving for them directly into a mutual fund. So, much less hassle.

From one military wife to another...you are doing great!! Keep up the good work.

[AmbitiousSaver]

The rental is in the same city... we started looking at different neighborhoods when we got back from Hawaii last May (my family lives there and it was our first trip back in 6 years) and our neighborhood was tagged by gangs. You notice it every summer. We found this house... we knew it would really stretch our budget, but we wanted a safe neighborhood and good schools for them... I know, I can see some people still shaking their head. But I LOVE this house.... I love the neighbors, I can see us staying here for as long as we are here (2011 or to 2017)... they call this place the black hole of the Navy... we were in San Diego and they sent us RIGHT BACK HERE. So we could stay here till 2010 or 2017.... who knows. I thought 2011 at least but DH said if he makes Chief, staying at his command would not be good for his career (although I don't know what that would do to our finances... its at least good the military pays us to move and gives us a dislocation allowance, but that would make having to decide what to do with THIS house bad too). Needless to say, the next house we buy won't be till he retires. And I want us to go back home to Hawaii.

I'm still not sure what to do about the rental. The tenants just signed another year lease and they are good tenants. It takes about 4 months for a place to sell here now and if it did sell I'd take an additional loss.

Since we aren't in the red at the end of the month income/expense wise... not rental wise, would it make any sense to try to pay the house off early after we tackle our CC, HELOC, and 2 car loans? It could turn a profit if I can get that mortgage down. That is really the main problem... we bought two houses when we really shouldn't have. Grant it, if the market turns around then we'll consider selling sooner but right now is such a bad time.

I'd consider taking the property manager off... she charges 10% rent a month to manage it, but we started with her cause I didn't know the legalities of turning it into a rental, how to check someone's credit, etc. And she knows repairmen that I don't. Set up the direct deposit into our account and has a standard procedure in case they miss one month's rent.

I don't know... this is going to sound bad... but the tenants have four kids of their own too and are military. I'm thinking what we'll probably do is since they are good tenants and giving us time to ride out the storm is... sell it after they move out. I guess when I think about it is... which I know I probably shouldn't be concerned with them... but I don't really want to be responsible for displacing another family especially in these times.

I don't know... the whole situation is overwhelming if I think about the whole thing so I'm trying to tackle it in little steps.

[maat55]

I've never been a fan of using a realtor to sell a home unless I had lots of equity. You should know before you sign a contract that you will loose on the deal.

I always start out FSBO, then call a realtor if needed. But, I have sold both my homes FSBO with no problem. I don't know what your options are if you have a contract in place, but if it is possible, I would try FSBO.

[creditcardfree]

I don't think that the tenants would have to move, necessarily. It does depend on what the buyer would be looking to do with the house. If they want a rental, one with good tenants on a lease, would be a positive. I would ask the realtor about that part.

Keep up with the little steps. The house may not to sell, if you really can tackle the other loans...but as quick as possible. Make sure everything you buy is looked at...groceries, insurance, cable, internet, phone, newspaper, kids activities. Look at EVERYTHING! Maybe you'll find some extra dollars to put towards loan payoff.